Michael Rosenblatt – Class Action Defense

September 16, 2026September 17, 2026 by Gerald L. Maatman, Jr.

It’s An Arbitration Agreement After All: Disney Compels Arbitration And Obtains Dismissal Of Class Claims In Antitrust Suit

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Mike Rosenblatt

Duane Morris Takeaways: On September 8, 2026, in Unger, et al v. The Walt Disney Company, No. 5:25-CV-01163 (N.D. Cal. Sept. 8, 2026), Judge Edward J. Davila granted Defendant’s motion to compel arbitration, ordered on a consolidated docket with Biddle, et al. v. The Walt Disney Company, No. 5:22-CV-07317 (N.D. Cal.). This decision serves as a clear example of arbitration agreements as a powerful tool for a company to dismiss class claims, and a critical reminder that a company that may not have signed an arbitration agreement can invoke an arbitration agreement in specific circumstances.

Case Background

Plaintiffs Cole Unger and Steven Prescott brought suit against the Walt Disney Company (“Disney”), alleging violations of the Sherman Act and corresponding state laws. Unger filed the Complaint on January 14, 2025 and filed a First Amended Complaint, adding Prescott as a plaintiff, on April 28, 2025. According to the First Amended Complaint, Disney allegedly undertook a “multifaceted campaign to suppress competition in the market for live television streamed over the internet to paying subscribers.” Specifically, Plaintiffs alleged that Disney used its ownership of ESPN to force streaming services to carry non-ESPN content in order to access ESPN, force streaming services to carry ESPN in its “base” package for customers, inflated the price of streaming ESPN through most favored nation clauses with streaming services, and provided anticompetitive rebates to Disney-owned streaming service Hulu. Plaintiffs brought claims on behalf of a putative class of fuboTV subscribers. The Unger lawsuit made similar allegations as another case, Biddle, et al. v. The Walt Disney Company, 5:22-CV-07317 (N.D. Cal.), brought on behalf of a putative class of YouTube TV subscribers and DirecTV Stream subscribers. The cases were consolidated on June 10, 2025.

Shortly before Unger filed his initial complaint, on January 6, 2025, Disney publicly announced its plan to purchase a 70% stake in fuboTV. The parties closed the deal on October 29, 2025, creating a newly combined fuboTV and Hulu + Live TV business.

On December 19, 2025, Disney filed a motion to dismiss Plaintiffs’ class claims, compel arbitration, and stay Plaintiffs’ individual claims pending arbitration. Disney filed its motion subject to fuboTV’s terms of service because Plaintiffs had assented to fuboTV’s terms of service when they subscribed to fuboTV. fuboTV’s terms of service included a provision compelling arbitration of all disputes and waiving class action claims subject to the terms of service. Disney argued that fuboTV’s terms of service, which authorized fuboTV’s “future affiliates” to invoke fuboTV’s rights under the terms of service, permitted Disney to compel arbitration of Plaintiffs’ claims and dismissal of Plaintiffs’ class claims.

The District Court’s Ruling

In a 26-page opinion, Judge Davila granted Disney’s motion to compel arbitration, dismissed Plaintiffs’ class claims, and stayed Plaintiffs’ individual claims pending arbitration. The opinion stressed that Plaintiffs did not dispute that they had assented to fuboTV’s terms of service when they signed up as subscribers. The Court held that the terms of service were “reasonably conspicuous” and that Plaintiffs had “unambiguously manifest[ed] assent” to terms of service. Op. at 9-10.

The Court held that Disney, as a non-signatory to the terms of service, could invoke fuboTV’s terms of service under the “future affiliates” provision. The Court stressed that under “the ordinary definitions of the words within the Future Affiliates Provision” were “clear and unambiguous, such that the Court will rely on its terms so long as this reliance would not lead to an absurd result.” Op. at 14. The Court then rejected Plaintiffs’ enforceability argument that Disney had not undertaken reciprocal contractual obligations, stressing that Disney was not required to “show that it undertook reciprocal obligations.” Op. at 15. Finally, the Court found that enforcement of the arbitration clause by a non-signatory would not lead to absurd results, distinguishing cases cited by Plaintiffs where disputes wholly unrelated to a company’s terms of service were found not to encompass the terms of service. Instead, the Court was unsympathetic to Plaintiffs’ argument that they did not expect to be entering into a contract with Disney when signing up for fuboTV, explaining that “courts have repeatedly found that future affiliates provisions, or clauses granting rights to successors, are valid, despite the existence of some inherent uncertainty.” Op. at 17-18.

The Court then undertook an unconscionability analysis, rejecting Plaintiffs arguments that fuboTV’s terms of service were procedurally and substantively unconscionable. The Court rejected Plaintiffs’ argument that the terms of service were substantively unconscionable as having “near infinite scope,” stressing that the canon of ejusdem generis requires courts to read broad contractual language in the scope of the specific language of the contract. Therefore, the terms of service had practical limitations based on the context of the agreement as a whole. Regarding procedural unconscionability, the Court found that the terms of service were not unconscionable because the terms were inconspicuous, included the ability for users to opt out, and were “not concealed in dense legalese inaccessible to lay consumers.” Op. at 24.

Implications for Companies

When addressing class action claims, companies should scour for any potential arbitration agreements a plaintiff may have signed, even where the plaintiff signed an arbitration agreement not directly with the Company. Courts regularly hold that non-signatories to arbitration agreements can invoke arbitration with a signatory based on multiple legal theories, including the explicit language of the arbitration agreement vesting rights in non-signatories, assignment clauses, estoppel, and a non-signatory’s third-party beneficiary status. Company mergers, like the Disney-fuboTV merger, can change a lawsuit’s calculus and require a plaintiff to individually arbitrate claims rather than petition for class certification in court.

The financial implications of invoking an arbitration agreement are substantial, as shown here. A plaintiff’s individual and class action claims can be dismissed in federal court even after the plaintiff survives a motion to dismiss. In this case, Disney had originally agreed to settle the case with all three subscriber classes for $55 million. Disney and the YouTube TV and DirecTV subscriber classes have since filed for settlement approval for $50 million. Given the reduced settlement now that the fuboTV subscriber class is not included, Disney may have saved $5 million in a settlement award it otherwise would have owed to fuboTV subscribers.

Finally, corporate counsel should regularly update its terms of service to comply with requirements for invoking arbitration in its jurisdiction. Though courts regularly enforce arbitration agreements, an otherwise valid arbitration agreement can be undone if a court finds that the agreement is unconscionable. Helpful provisions for conscionability include permitting the ability to opt out of mandatory arbitration, drafting class waivers and mandatory arbitration provisions in clear and non-legalese language, and allowing signatories time to review provisions. Companies should also require signatories to terms of service to review and affirmatively agree to updates to terms of service and include any waiver of rights in large, clear language.

September 8, 2026September 8, 2026 by Gerald L. Maatman, Jr.

One Step At A Time: Another District Court Rejects The Lusardi Bifurcated Discovery And Conditional Certification Approach

By Gerald L. Maatman, Jr., Mike Rosenblatt, and Anna Sheridan

Duane Morris Takeaways: On September 3, 2026, in Harris, et al. v. Shoe Show, Inc., No. 3:25-CV-00398 (W.D.N.C. Sept. 3, 2026), Judge Susan C. Rodriguez denied Plaintiffs’ pre-discovery motion for conditional certification of an FLSA collective action and granted Defendant’s emergency motion for expedited, single stage discovery. The decision joins the growing trend of courts declining to bifurcate FLSA discovery into conditional certification and post-conditional certification stages.

Case Background

Plaintiffs Benjamin Harris and Marticilla Roberts brought suit against Shoe Show, Inc., alleging violations of the Fair Labor Stands Act (“FLSA”). According to the Complaint, filed June 11, 2025, Defendant Shoe Show, Inc. allegedly failed to pay store managers for all overtime hours worked. Specifically, Plaintiffs allege that they were required to communicate with co-workers and supervisors about work-related matters outside of the store while off-the-clock. The Complaint defined Plaintiffs’ proposed FLSA collective action as “all hourly-paid and overtime-eligible Store Managers, who worked over 40 hours in any workweek for Defendant” for the prior three plus years (the alleged lookback period was slightly longer than the typical three years for an FLSA claim due to an alleged tolling agreement).

On July 25, 2025, Plaintiffs filed a pre-discovery motion for conditional certification of a collective action under FLSA § 216(b). On July 28, 2025, Defendant filed a motion to expedite discovery and requested a stay on briefing on Plaintiffs’ pre-discovery motion for conditional certification. Defendant’s motion stated that Plaintiffs used “boilerplate declarations” that “call[ed] into question their evidentiary value.” Defendant also provided declarations from thirty store managers to counter Plaintiffs’ claims to demonstrate that their claims “are not commonly shared by the Company’s Store Managers.”

The District Court’s Ruling

In a 3-page opinion, Judge Rodriguez denied Plaintiffs’ pre-discovery motion for conditional certification and granted Defendant’s motion for expedited discovery. The Court was brief in its analysis, citing “the arguments, record, and applicable authority, including the text” of the FLSA. Op. at 1.

The Court primarily relied on the growing case law revisiting the so-called “two-step process” for certification of FLSA collective actions. Prior to 2021, in what is commonly referred to as the Lusardi approach, courts almost universally applied a two-step process to certification of FLSA collective actions, first requiring a plaintiff to make a modest factual showing that plaintiff was similarly situated to others, followed by a second stage with a more thorough examination of evidence with the benefit of discovery. See Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987). In 2021, the Fifth Circuit in Swales, et al. v. KLLM Transport Services, LLC, 985 F.3d 430, 436 (5th Cir. 2021), rejected the two-step approach for evaluating motions for certification of collective actions, holding that district courts should “rigorously scrutinize the realm of ‘similarly-situated’ workers … at the outset of the case.” In 2023, the Sixth Circuit in Clark v. A&L Homecare & Training Center, LLC, 68 F.4th 1003 (6th Cir. 2023), likewise rejected the two-step approach, though introduced a new standard requiring plaintiffs to demonstrate a “strong likelihood” that other employees are “similarly-situated” to the plaintiff.

Though the Fourth Circuit has yet to weigh in on this issue, Judge Rodriguez cited the Fifth Circuit’s approach in Swales, the Sixth Circuit in Clark, and two district court decisions within the Fourth Circuit rejecting bifurcated certification under the FLSA. Op. at 2. See Hubbard v. Southwood Realty Co., No. 3:24-CV-00481, 2026 WL 823169 (W.D.N.C. Mar. 25, 2026); Mathews v. USA Today Sports Media Grp., LLC, 1:22-CV-1407, 2023 WL 3676795 (E.D. Va. Apr. 14, 2023).

Implications for Companies

When addressing FLSA collective action claims, corporate counsel should be cautioned against accepting Lusardi’s bifurcated approach without pushback and cite to Swales and Clark to slow down a plaintiff’s race to conditional certification. After Hubbard, the Harris decision is now the second district court opinion within the Fourth Circuit in 2026 to reject Lusardi and adopt a single, streamlined discovery approach for FLSA certification. While most circuits still use the Lusardi approach, the circuit split created by the Swales (5th Circuit), Clark (6th Circuit), and Richards, et al. v. Eli Lilly & Co., 149 F.4th 901 (7th Cir. 2025), rejecting Lusardi shows that momentum is moving away from bifurcated discovery.

In the Fourth Circuit in particular, companies can add Harris, in addition to Hubbard and Mathews,to their toolkit to strengthen their arguments against the two-step Lusardi approach. As with any circuit split, this latest trend against bifurcated discovery reinforces how critical it is for companies to understand the approach in the district where they are being sued, but the recent trend away from Lusardi should give companies the impetus in any jurisdiction for arguing against bifurcated discovery and rushing to conditional certification.

August 20, 2026August 20, 2026 by Gerald L. Maatman, Jr.

Eighth Circuit Affirms Landmark Billion Dollar Class Action Settlement In Real Estate Broker Commission Antitrust Litigation

By Gerald L. Maatman, Jr., Mike Rosenblatt, and Brett Bohan

Duane Morris Takeaways: On August 19, 2026, in Burnett v. National Association of Realtors, Nos. 24-3444, 24-3450, 24-3451, 24-3527, 24-3585, 24-3619, 24-3621 (8th Cir. Aug. 19, 2026), the U.S. Court of Appeals for the Eighth Circuit affirmed the district court’s final approval of a nationwide class action settlement resolving antitrust claims alleging that the National Association of Realtors (the “NAR”) and several major real estate brokerage franchisors conspired to inflate buyer-broker commissions. The settlement exceeds $1 billion in total value, eliminates the longstanding rule requiring sellers to offer compensation to buyer brokers through multiple listing services, and survived challenges from seven separate groups of objectors and intervenors.

Case Background

Starting in 1996, NAR’s Cooperative Compensation Rule required home sellers listed on an NAR-affiliated Multiple Listing Service (“MLS”) to offer the buyer’s broker a commission. Id. at 9. In practice, this rule meant “sellers paid a combined commission of roughly 5-6% of the sale price, split roughly evenly between the seller’s broker and the buyer’s broker” even though the buyer’s broker represented the buyer. Id. Because of the supremacy of NAR-affiliated MLSs in the national residential market, the rule applied nationwide. Id.

In April 2019, Rhonda Burnett filed a class action in the Western District of Missouri on behalf of a group of Missouri home sellers against NAR and four brokerage franchisors—HomeServices of America, Anywhere Real Estate, RE/MAX, and Keller Williams. Id. She alleged that the defendants had conspired to fix prices in violation of Section 1 of the Sherman Antitrust Act. Id. After trial in October 2023, a jury awarded $1.785 billion in damages subject to trebling. Id. at 10. While post-trial motions were pending, the parties in this case and in several related nationwide actions reached a global settlement. Id. NAR agreed to pay the settlement fund $418 million, HomeServices agreed to pay $250 million, and additional opt-in brokerages brought the total fund above $1 billion. Id. at 11. NAR also agreed to eliminate the Cooperative Compensation Rule and implement changes restructuring buyer-broker compensation. Id.

The district court entered an 88-page final approval order certifying a nationwide settlement class and approving the settlement under Rule 23. Id. at 13. Seven groups of objectors and intervenors appealed the settlement. Id. at 13 n.3.

The Eighth’s Opinion

The Eighth Circuit upheld the district court’s approval of the settlement and rejected the objectors’ and intervenors’ challenges.

Standing. The Eighth Circuit rejected the argument that plaintiffs lacked Article III standing for injunctive relief, finding an ongoing injury because “home prices remain inflated absent” the settlement’s practice changes. Id. at 17.

Rule 23(e)(2) Fairness Factors. The Eighth Circuit clarified that Rule 23(e)(2), as amended in 2018, provides the authoritative factors for evaluating class-action settlements. Id. at 21. However, the district court did not err by considering additional factors, even if it was not required to do so. Id.

Overbroad Release Challenge. Objectors/Intervenors contended the settlement impermissibly extended to New York claims involving the Real Estate Board of New York’s (“REBNY”) independently operated rules. Id. at 22. The Eighth Circuit held that both the NAR and REBNY claims hinged on the same operative factual predicate—that industry rules were used to keep brokerage fees artificially high at the expense of home buyers and sellers. Id. at 23. Because the released claims shared a “common nucleus of operative fact” with the litigated claims, the breadth of the release was permissible. Id.

Adequacy of Representation. The Eighth Circuit rejected the argument that class counsel had provided inadequate representation. Id. at 26. It held that the district court did not err in finding class counsel was qualified, had pursued the case aggressively through trial, and negotiated at arm’s length with the defendants. Id.

Attorneys’ Fees. The Eighth Circuit upheld a $333 million attorneys’ fees award—one-third of the fund—as consistent with Eighth Circuit precedent under the percentage-of-the-benefit approach. Id. at 30-31.

Distribution Method.The Eighth Circuit held that the parties did not need to establish a detailed distribution plan prior to final settlement approval. Id. at 32. A notice that “outlines the settled and released claims and states the total settlement amounts” is sufficient. Id.

Fairness Hearing Procedure. Objectors/Intervenors also challenged the district court’s requirement that all objectors appear in person at the fairness hearing. Id. The Eighth Circuit found due process was satisfied where counsel for non-appearing objectors was able to argue at the hearing, and the district court addressed the objections on the merits. Id.

Adoption of Proposed Order. The Eighth Circuit rejected the argument that the district court’s adoption of the plaintiffs’ proposed settlement order warranted heightened scrutiny, reaffirming that “even when the trial judge adopts proposed findings verbatim, the findings are those of the court and may be reversed only if clearly erroneous.” Id. at 33 (quoting Anderson v. City of Bessemer City, 470 U.S. 564, 572 (1985)).

Timeliness of Intervention. The Eighth Circuit affirmed the denial of a group of objectors’ intervention motion because (1) “the litigation had proceeded for five years” before they filed the motion, (2) the intervenors knew about the case, (3) they offered no explanation for the delay, and (4) reopening the settlement would prejudice the parties. Id. at 34-35.

Implications For Companies

The Eighth Circuit’s decision carries broad significance. First, the sheer magnitude of the settlement, more than $1 billion in total, highlights the extraordinary financial exposure that antitrust price-fixing claims can generate. Under the Sherman Act, depending on the claims and damages alleged, successful plaintiffs may be entitled to treble damages, meaning that even a single adverse jury verdict can spiral into catastrophic liability. Businesses that participate in industry-wide arrangements touching price, commissions, or fee structures should ensure that any agreements or coordinated practices involving competitors are reviewed by experienced antitrust counsel before implementation.

Second, it reinforces that federal courts retain wide latitude to approve nationwide settlements releasing claims beyond the originally certified class’s geographic scope, provided the claims share a common factual predicate. Companies facing multi-state litigation should recognize that a settlement in one jurisdiction may resolve related claims elsewhere.

Third, the opinion provides the Eighth Circuit’s first definitive guidance on the 2018 Rule 23(e)(2) amendments, making clear that Rule 23 supplies the mandatory factors while circuit-specific tests may supplement but not supplant them.

Finally, the decision reinforces the high deference appellate courts afford district courts evaluating complex settlements following contested litigation and trial.